Refer to Figure 11

question 138

Multiple Choice

Refer to Figure 11.3.Assume aggregate demand is represented by AD₁ and full-employment output is $5.6 trillion.If aggregate demand decreases by the amount of the GDP gap,equilibrium will occur at

• A)Point a.
• B)Point b.
• C)Point c.
• D)Point D.Equilibrium occurs where the new aggregate demand AD₂ and AS intersect,at point c.

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Definitions:

Anxiety

A state of fear or apprehension about what's to come.

Secondary Gains

Unintended benefits received from being in a sick or injured state, such as attention, sympathy, or avoidance of responsibility.

Mute

Unable or unwilling to speak, often due to psychological or physiological conditions.

Kindness

The quality of being friendly, generous, and considerate towards others without expecting anything in return.